Billionaire Stanley Druckenmiller Sells Off Consumer Stocks, Loads Up On Materials, Energy

No Time For Tobacco Turnaround

Philip Morris International Inc. (NYSE:PM), the giant tobacco company, was also on the sell list of Mr. Druckenmiller’s family office, as the stock traded in a range during most of the second quarter. The company’s financial results for the second quarter have confirmed investors’ fears about its short-term prospects. Philip Morris International Inc. (NYSE:PM) posted $6.65 billion in revenue and earnings of $1.15 per diluted share, missing Wall Street’s expectations of $1.20 per share on the back of $6.77 billion in revenue. The company also reported a 4.8% drop in cigarette volume, while shipment volume fell across the globe. Philip Morris International Inc. (NYSE:PM)’s bottom-line was severely affected by the strong dollar in recent years and the company was forced to increase prices to prevent revenue from falling even further. However, the company’s management believes that currency headwinds are easing and have increased their 2016 earnings guidance to $4.45-to-$4.55 per share, from previous projections of $4.40-to-$4.50 per share. There were six billionaires in our database with positions in Philip Morris on June 30.

Energy Headed Up

Duquesne Capital’s largest new addition during the quarter was a new stake in Halliburton Company (NYSE:HAL). According to its 13F filing, the fund has built a position that amounts to approximately 2.18 million shares worth $98.6 million at the end of June. Despite increased optimism, energy companies have continued to reduce their workforces during the second quarter, with Halliburton Company (NYSE:HAL) having slashed 5,000 jobs. Since the beginning of the slump in energy prices, the company has decreased its workforce by 40%. Even so, its financial report for the second quarter was not pretty, though it did top estimates. Halliburton posted $3.83 billion in revenue and an adjusted loss of $0.14 per share, while analysts had projected $3.74 billion in revenue and a loss of $0.19 per share. Halliburton Company (NYSE:HAL) CEO Dave Lesar said he expects a turnaround in the oil business in North America. “There’s a spring in their step I didn’t see earlier in the year,” Mr. Lesar said, referring to Halliburton’s customers. “In short, they are getting back to business.”

Mining Is On The Rebound

Lastly, Mr. Druckenmiller and his team also added Freeport-McMoRan Inc (NYSE:FCX) to their shopping list, with Duquesne Capital having amassed 3.47 million shares of the company during the quarter. According to its 13F filing, the position was worth some $38.6 million at the end of June. After a massive selloff dating back to the beginning of 2011, Freeport-McMoRan Inc (NYSE:FCX) seems to have found its bottom in February 2016 and is currently up by 84% for the year. The company has been taking aggressive measures to reduce its debt, having raised $5.5 billion through asset sales and equity offerings during the second quarter. Analysts are also optimistic, having estimated a forward P/E multiple of 11 and having raised their earnings estimates for 2016 to $0.55 per share from $0.29 per share. The consensus EPS for 2017 has also registered a boost to $1.11 per share, from previous projections of $0.95 per share. Billionaire Carl Icahn is also optimistic about the prospects of Freeport-McMoRan Inc (NYSE:FCX), as his fund maintained its 104 million-share stake throughout the quarter.

Disclosure: None